Altice Europe N : NV - Q3 2020 MD&A

MANAGEMENT'S DISCUSSION AND ANALYSIS

ALTICE EUROPE N.V.

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2020

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Table of contents

Chapter	Page
1	Overview	3
2	Strategy and performance	11
3	Basis of presentation	12
4	Group financial review	13
5	Revenue	20
6	Adjusted EBITDA	24
7	Operating profit of the Group	26
8	Result of the Group - items below operating expenses	28
9	Liquidity and capital resources	30
10	Capital Expenditures	32
11	Key operating measures	34
12	Other disclosures	35
13	Key Statement of Income items	36

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1 OVERVIEW

1.1 Overview of the Group's business

The Group is a multinational group operating across two sectors: (i) telecom (broadband and mobile communications) and (ii) content and media. The Group operates in France, Portugal, Israel and the Dominican Republic. The Group also has a global presence through its online advertising business Teads. The parent company of the Group is Altice Europe N.V. (the "Company"), which succeeded Altice S.A. pursuant to a cross-border merger completed on August 9, 2015 (the "Merger").

The Group had expanded internationally in previous years through several acquisitions of telecommunications businesses, including: SFR and MEO in Western Europe; HOT in Israel; and Orange Dominicana and Tricom in the Dominican Republic. The Group's acquisition strategy has allowed it to target cable, FTTH or mobile operators with what it believes to be high-quality networks in markets the Group finds attractive from an economic, competitive and regulatory perspective. Furthermore, the Group is focused on growing its businesses by focusing on cost optimization, increasing economies of scale and operational synergies and improving quality of its network and services.

As part of its innovative strategy, the Group is focusing on investment in its proprietary best-in-class infrastructure, both in fibre and mobile, commensurate with the Group's position as a number one or number two operator in each market. The Group continues to improve its competitiveness in fixed-mobile convergence and maintains its focus on improving customer experience, reflected in a sustained commercial momentum achieved in 2019.

The Group continues to monetize its content investments and drive convergence between telecom and media. RMC Sport successfully entered its second Champions League season (2019-2020), with a greater audience in 2020 compared to 2019. The COVID-19 pandemic has however interrupted the European football in March 2020, resulting in the suspension of the Champions League for the end of the first quarter and duration of the second quarter of 2020 but resumed in August, as a straight knockout tournament played behind closed doors.

On July 27, 2020, Altice Europe announced two agreements with Mediapro. Firstly, for the season 2020-2021, Altice Europe will resell the UEFA rights to Mediapro in exchange for Altice Europe's right to resell Mediapro's TELEFOOT channel (including the main football matches for French Ligue 1 and Ligue 2). This will allow Mediapro to broadcast the UEFA Champions League and Europa League. Both the RMC Sport channel and Mediapro's TELEFOOT channel will broadcast the two competitions from October 2020. SFR will offer all of the football to its customers with RMC Sport, TELEFOOT, Canal+ and BeIN SPORTS. Secondly, for the seasons 2021-2022,2022-2023 and 2023-2024, Altice Europe entered into a distribution agreement with Mediapro to resell the TELEFOOT channel (including the main football matches for French Ligue 1 and Ligue 2) with a revenue share mechanism. This is expected to generate additional revenues for the Altice France residential segment. With this agreement, Altice Europe maintains the commitment to improve Altice TV cash flow trends, approaching break-even, while SFR customers will continue to benefit from the best football offer in France.

Teads, the digital advertising business acquired in 2017, continues to be a leading player in its space, empowering the most renowned publishers in the world to connect to an audience of 1.5 billion people every month.

On September 11, 2020, the Company and Next Private B.V. (the "Offeror"), a direct subsidiary of Next Alt, jointly announced that a conditional agreement had been reached on a recommended public offer (the "Offer") to be made by the Offeror for all common shares A and common shares B in the capital of the Company for €4.11 in cash per share (cum dividend). This represents a total consideration of approximately €2.5 billion. Following the Offer, the Offeror wishes to delist the Company.

1.2 Products, services and brands

Through its various Group companies, the Group provides fixed services, mobile telephony services and media and advertising services to residential and business customers in all the geographies in which it operates. In addition, the Group offers a variety of wholesale and other services across its footprint. The Group also invests in specific content to supplement and enrich the services the Group provides.

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The Group's fixed services (high-qualitypay-TV, broadband Internet and fixed-line telephony) are mainly provided over its proprietary fibre- and cable-based network infrastructure which are either FTTH, FTTB, DOCSIS 3.1 or DOCSIS 3.0 enabled, offering download speeds of between 30 Mbps and 10 Gbps depending on geography. On a blended basis, as of September 30, 2020, the Group's high-speed broadband services passed 27.1 million fibre/cable homes, with 5.5 million fibre unique customers. The Group offers xDSL/DSL/DTH services, with 9.5 million residential fixed unique customers as of September 30, 2020. The Group also offers mobile services in the geographies in which it operates, through 2G, 3G and 4G Long-Term-Evolution ("LTE") technology (with 1 Gbps achieved in the second quarter of 2019). On a blended basis, as of September 30, 2020, the Group had 25.9 million residential mobile subscribers (of which 19.6 million were postpaid subscribers).

The Group is focused on the convergence of fixed and mobile services by cross-selling and up-selling its offerings to further increase its multi-play penetration (except for Israel, where the regulator does not allow it). The Group's fibre and mobile technologies enable it to offer premium digital services, attractive interactive features (e.g., 'MEO Go!' offering in Portugal) and local content (e.g., through its 'HOT 3' channel in Israel) to its customers, including premium football rights in France ('RMC Sport' channels in France). The Group has leveraged its network advantage to drive its multi-play strategy and offer an attractive combination of content, speed and functionality. The Group offers to its residential customers bundled double- and triple-play fixed services, which comprises paying for a combination of TV, broadband Internet access and fixed-line telephony services together with customer premise equipment (e.g., through its new set-top box SFR Box 8 offering in France) at what the Group believes are attractive prices. The Group believes the demand for its multi-play packages is primarily driven by the inherent quality of the various products included within them, which the Group believes are among the best available in the markets in which it operates. Although the Group is convinced its products offer the best value for money and cost-savings for customers when purchased as part of multi-play packages, the Group also offers most of these services on a stand-alone basis in most of its geographies. In some markets, such as France and Portugal, the Group offers quad-play bundles including both fixed and mobile services.

The Group is focused on strategically developing content to complement its fixed and mobile services with high- quality content offerings on its own networks and to external partners. The Group owned the exclusive broadcast rights for the UEFA Champions League and Europa League for the three seasons from 2018/2019 to 2020/2021. In 2019 and 2020, the Group broadcasted in France the UEFA Champions League and Europa League for the second year. On July 27, 2020, Altice Europe announced an agreement with Mediapro to resell the UEFA rights to Mediapro in exchange for Altice Europe's right to resell Mediapro's TELEFOOT channel for the season 2020-2021, which will allow SFR to offer its subscribers all French (Ligue 1, Ligue 2) and European (UEFA Champions League, UEFA Europa League, English Premier League, Spanish and Italian championships) football. In addition, on July 27, 2020,

1. distribution agreement with Mediapro was announced for the seasons 2021-2022,2022-2023 and 2023-2024, to resell Mediapro's TELEFOOT channel (including the main football matches for French Ligue 1 and Ligue 2) with a revenue share mechanism.The Group continues to broadcast and distribute various other sports events in selected countries, including the English Premier League, the Portuguese Liga, the French National Basketball, the English rugby and boxing, extreme sports and combat sports events.

Teads is a leading digital video advertising business and distributes ads to over 1.5 billion people every month. Teads solutions combine high-quality inventory with smart uses of data, along creative artificial intelligence. This makes marketing more precise and more efficient, whilst enabling brands to deliver the optimal advertising experience personalized to the user.

The Group markets its products and services under multiple brands, including but not limited to the following brands: 'SFR' and 'RED' in France; 'HOT' in Israel; 'MEO' and 'MOCHE' in Portugal; 'Altice' in the Dominican Republic, and, in each case, several associated trademarks.

1.3 Activities

The Group tracks the performance of its business by geography and further analyses its revenue by activity. The Group has identified the following activities: residential services, business services and media (TV and content, press and targeted advertising).

1.3.1 Residential services

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